Hightech Fee Techniques (HPS) is gearing up for a interval of intense growth that would see it doubtlessly purchase smaller rivals because it eyes a much bigger slice of the worldwide funds market. The Moroccan monetary expertise agency, which presents its flagship powerCARD fee resolution to greater than 500 establishments in 95 international locations, is searching for to develop its annual revenues to between $220m and $300m by 2027.
Abdeslam Alaoui Smaili, HPS CEO and co-founder, tells African Enterprise that the agency is on monitor to satisfy these bold objectives, pointing to the previous 12 months’s outcomes. In 2024, the corporate reported revenues of 1.267bn Moroccan dirham ($140m), a 6.4% year-on-year improve. “We’re midway there,” he says, including that “about 10% to fifteen% of future income development will come from natural methods and one other 10% to fifteen% via acquisitions that make sense.”
Final 12 months, the agency purchased Dublin-based CR2, a digital banking and fee software program developer, for an undisclosed quantity. Based on the agency’s investor presentation, the acquisition of CR2 is anticipated to contribute €30M in revenues in 2025. The deal additionally offers HPS entry to a shopper portfolio, together with three new world prime 100 banks.
Actively searching for acquisitions
On the again of the CR2 acquisition, Smaili says the agency is actively searching for new offers.
“We have now a staff taking a look at totally different targets across the globe. They observe three guidelines when assessing alternatives. The primary one is: can we get the expertise quicker if we purchase one other firm than if we construct it ourselves?”
The second precept, he says, is that the acquisition goal ought to provide entry to a brand new phase of consumers the place the agency can profit from expanded attain. “At this time we’re working with banks and processors, areas the place we’re historically sturdy,” he explains. “We’re additionally working with retailers, e-gov, and telcos,” he provides, describing these buyer segments as areas the place the agency must “achieve extra traction” – doubtlessly via acquisitions.
“The third factor the staff seems to be at is geographical presence. Currently we have now invested lots in new geographies,” he says, citing the agency’s foray into Australia and Canada, in addition to growth in key Asian markets like India.
Almost half of HPS’s income comes from Africa, adopted by Europe and the Center East. HPS expanded to Australia final 12 months and to Canada in 2023. As of 2022, 7% of the agency’s income was generated within the Americas and 9% in Asia. The agency is aiming for every of those areas to contribute at the very least 15% to group revenues by 2027.
Requested how the agency will finance its future acquisitions, Smaili says all choices are at present on the desk. It will probably use money from its reserves, situation shares, faucet debt, or pursue a mixture of all three, he says. “It can all rely on the acquisition in consideration.”
The CR2 acquisition was financed primarily by financial institution debt, HPS’s investor presentation reveals. The corporate has in recent times change into extra concerned in acquisitions in contrast with previous durations. In 2021, HPS accomplished the takeover of ICPS, a fee switching and card administration companies firm. That very same 12 months it additionally closed the acquisition of IPRC, a supplier of distant administration of digital fee techniques. The final acquisition earlier than this was in 2010 when it took over ACPQualife, a supplier of software program testing and qualification companies.
Natural development boosted by new income mannequin
Shifting the dialog to how HPS is pursuing natural development, Smaili argues {that a} latest change to the corporate’s enterprise mannequin has resulted in stronger income development.
“Our income mannequin was beforehand based mostly on the variety of playing cards, mobiles or retailers signed on, however we have now shifted to a SaaS (software-as-a-service) mannequin that permits us to monetise utilization,” he says.
“The extra the platform is used the extra income we get,” he explains.
“Earlier than, we have been promoting a license and the product was operated by the shopper; now the purchasers are telling us: ‘I don’t need to become involved within the expertise facet, or on safety and compliance points. Please run it for me.’ So we are literally having extra income from these prospects as a result of we’re operating it for them.”
To maximise the potential of its SaaS platform, HPS is investing in cloud knowledge centres in key development markets, together with the US, the place it finalised a cloud knowledge centre in 2024. One other cloud knowledge centre is at present being arrange in Australia.
The corporate utilises traditional knowledge centres in Africa, Center East, and Europe, and hybrid ones in South-East Asia. Cloud knowledge centres, not like traditional ones that require heavy up-front investments, permit companies to learn from the pay-as-you-go mannequin, which in the end makes for a extra environment friendly and scalable enterprise.
Discussing the applied sciences most definitely to drive future development within the funds business, he singles out the usage of blockchain by central banks to develop central financial institution digital currencies (CBDCs) as a significant alternative. “This can be a nice alternative, as a result of CBDCs will cut back money, and subsequently will improve the variety of digital transactions.
“We consider that it is a nice alternative for HPS to assist the transition from money to CBDCs,” he says, including that “we aren’t targeted on the CBDC administration, however fairly on the transaction administration.”
Hiring locals
Constructing belief with prospects, regulators and different stakeholders is vital to the success of HPS’s development ambitions, Smaili emphasises. Belief, he believes, is constructed by making certain sturdy native illustration in enterprise groups within the totally different markets the agency operates in.
“We consider variety is a energy. In every place that we construct, we rent native individuals who will perceive what’s constructed, the wants of the market, and the unsaid issues in conferences. So our problem is to be sure that we’re capable of proceed this proximity with our prospects, this heat of the connection, which is on the finish a difficulty of belief,” he says.
The group, which he co-founded alongside two companions in 1995, now has about 1,500 workers and workplaces in 13 international locations. The query might be whether or not the agency can execute its newest development technique – particularly the acquisitions – with out overloading its steadiness sheet with debt.
The agency closed 2024 with 244.59m Moroccan dirham ($26.8m) of money, in contrast with 211.04 dirham ($23.2m) of money the earlier 12 months. Debt then again surged from 116.15 dirham ($12.7m) in 2023 to 585.12m dirham ($64.2m) in 2024, partly reflecting the affect of the debt-financed acquisition of CR2 on the corporate.
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